Burton Malkiel Believes Wealthy Would Do Better in Index Funds

Burton Malkiel, professor of economics at Princeton University and famous author, says the wealthy should avoid hedge funds because of their high fees. Mr. Malkiel has another objection to them. “There are very few that are any good,” he said. He added that his research had shown the good hedge funds of one era were not the good ones of another. And even if the hedge fund is a good one, he said, it’s likely to be selective in its investors or simply be closed to new ones.

While Malkiel will own a few stocks for fun, he keeps his “serious” money in index funds.

Disclaimer: It is very difficult to outperform a buy and hold strategy. Many investors have found themselves best served over long time horizons by investing regularly in a diversified portfolio of stocks or low cost, broadly diversified indexed stock funds. Information presented is based on analysis of past data and assessments by the Tactical Timing System model. Future performance may not reflect past performance. Profitable trades are not guaranteed. No system or methodology ensures stock market profits. Although accuracy is strived for, no guarantee is made regarding the accuracy of data presented. Nothing presented here should be considered investment advice, but merely the humble opinion of the author.